Outside or inside, it's your call. Or the weather's call. Take a 10- to 20-minute walk just to get your blood flowing. You don't even have to push yourself -- the point here is to start developing a habit and get yourself a little warmed up before performing your initial assessment.
Do 10 minutes if you're feeling especially crappy, 20 minutes if you have a moderate amount of energy.
The initial assessment determines a baseline score for lower-body, upper-body, and core strength that you can compare yourself to at the end of the challenge. All you need is a timer and somewhere you can record your scores (make a note in an app, or use old-school pen and paper).
For the first two exercises, squats and push-ups, you want to record how many you can do in 60 seconds. For the final exercise, plank, you want to see how long you can hold a plank. As soon as your form starts to suffer -- your back sways, you cheat by pushing your hips to the sky, or you sag your chest and head between your shoulders -- the time stops.